Rennie, R. (2010) Land registration and the decline of property law. Edinburgh Law Review, 14 (1). pp. 62-79. ISSN 1364-9809 http://eprints.gla.ac.uk/45532/ Deposited on: 02 April 2012 Enlighten – Research publications by members of the University of Glasgow http://eprints.gla.ac.uk EdinLR Vol 14 pp 62-79 DOI: 10.3366/E1364980909000912 Land Registration and the Decline of Property Law Robert Rennie☼ A. INTRODUCTION B. SOME EXAMPLES (1) Servitudes (2) Sasine descriptions (3) Real burdens (4) Pertinents (5) Positive prescription (6) Alteration of flatted properties (7) Proprietors in possession (8) Offside goals C. THE PROBLEM OF PROFESSIONAL NEGLIGENCE D. CONCLUSION A. INTRODUCTION Land registration in Scotland has a long history. The Register of Sasines was established as early as 1617.1 Earlier still there had been a system of public registration of instruments of sasine, and before that the instruments were recorded in the protocol books of notaries.2 The point of having a public register was to provide certainty and to regulate preferences. The Register of Sasines, still in operation but now being phased out, is simply a public record of deeds. While real rights in land could not usually be obtained without recording in that Register, the act of recording of itself did nothing to validate or enhance the title. The actual interpretation of the title as to boundaries, burdens and the like remained essentially a private matter in which the Keeper of the Registers of ☼ Professor of Conveyancing, University of Glasgow. 1 Registration Act 1617 (RPS 1617/5/30). 2 See J Craigie, Scottish Law of Conveyancing: Heritable Rights,3rd edn (1899) 56-62. 62 Vol 14 2010 land registration and the decline of property law 63 Scotland took no part. The rights and indeed obligations of the owner of the land had to be determined from the deeds themselves. The Land Registration (Scotland) Act 1979 introduced both a new register, the Land Register of Scotland, and also a whole new system of registration. In place of registration of deeds there was now to be registration of title. Under registration of title the register is, or should be, a register of rights in land. The extent of a real right is defined in the final act of registration and in most systems is, subject to certain qualifications, guaranteed by the state. Accordingly when a property comes to be registered for the first time the registration authority must examine the existing title to ensure its validity and must also ascertain and disclose on the register subordinate real rights such as rights in security. Burdens should also be shown so that the portfolio for an individual property – in Scotland known as the title sheet – contains everything one needs to know, including physical extent, securities and other encumbrances. Once registration is complete the title sheet is the measure of the real right and other rights are, with some exceptions,3 cut off. The extent of the ownership and the encumbrances and burdens affecting ownership are all defined or created at the point of registration in what might be viewed as a “Garden of Eden” moment. In Scotland at least the system can be regarded as a “positive” one in the sense that title flows from the register and not from the deeds or application forms which are merely the instruments used in the process of creating, transferring, restricting or burdening the real right.4 It is apparent that the majority of property law issues surrounding a particular title must be settled during the process of first registration, that is to say at the time when the property switches from the Register of Sasines to the Land Register.5 The final decision on what is to be registered is of course one for the Keeper or, in practice, for her officials, although there may be discussion with the parties concerned. There are rights of appeal to the Lands Tribunal and the courts.6 For a system of land registration to work on a practical level there have to be general policies laid down by the registration authority. In Scotland these can be found in the Registration of Title Practice Book, now in its second edition, and in a series of policy updates on the website of Registers of Scotland.7 It is obvious 3 Known in Scotland as “overriding interests”. For a definition, see Land Registration (Scotland) Act 1979 s 28(1). 4 See Scottish Law Commission, Discussion Paper on Land Registration: Void and Voidable Titles (Scot Law Com DP No 125, 2004; available at www.scotlawcom.gov.uk)pt1. 5 Normally this occurs on the first occasion on which the property is transferred on sale: see Land Registration (Scotland) Act 1979 s 2(1)(a)(ii). 6 Land Registration (Scotland) Act 1979 s 25. 7 www.ros.gov.uk/updates. 64 the edinburgh law review Vol 14 2010 that, in applying a particular policy to a particular situation, an officer at the Land Register may have to take a view on a particular point of property law. Depending on the seriousness of the point an application for registration may be rejected in whole or in part or registration may be effected but subject to an exclusion of the state indemnity.8 It is in these cases that there is often a conflict between the policy adopted at the Land Register and the law of property itself. To some extent this conflict arises from the very nature of registration of title. Recently the Scottish Law Commission has described the system of registration as “bijural” because it seems to operate under two different sets of laws.9 A bijural system recognises that there may be more than one person claiming to be an owner of land. It also recognises, however, that ownership derives from the act of registration itself and that registered ownership will, in the first instance at least, trump the claims to ownership of other parties. It does not matter that an alternative claim would have been preferred in terms of pure property law, and hence under the former system of registration involving the Register of Sasines. A distinction may thus arise between the person registered as owner and the person who is the “true” owner under ordinary property law principles. In some cases it may be possible to rectify the resulting inaccuracy in the Register, but the right of the Keeper to do so is limited.10 In particular, if the registered owner is in possession it is, generally speaking, only possible to rectify where the inaccuracy was caused wholly or substantially by the fraud or carelessness of that owner.11 The policy of the legislation is thus to favour the registered proprietor over the “true” owner, with the latter receiving compensation rather than the return of the property.12 This policy can be justified on the ground that the Register is meant to be the measure of real rights in land. Moreover, there is a long-held view that one should be able to rely on “the faith of the records”. In the leading case of Anderson v Lambie, Lord President Cooper put it in this way:13 The faith of the records is a cardinal and distinctive feature of the Scottish law of heritable rights. If a disposition has been recorded in the public records of Scotland .. how can anyone tell whether the interests of bona fide third parties will not be affected if that disposition is now reduced and replaced by another? 8 Land Registration (Scotland) Act 1979 ss 4, 12(2). 9 Scottish Law Commission, Discussion Paper on Land Registration: Void and Voidable Titles (n 4) para 1.11. 10 Land Registration (Scotland) Act 1979 s 9. 11 Other instances are listed in s 9(3)(a). 12 Land Registration (Scotland) Act 1979 s 12(1)(b). 13 1953 SC 94 at 103. The House of Lords in allowing the appeal took no cognisance of this “cardinal principle”: see 1954 SC (HL) 43. Vol 14 2010 land registration and the decline of property law 65 As a result of the work of the Scottish Law Commission, there is likely to be a firm proposal to change from the current “positive” system of land registration to one in which registration will no longer, of itself, confer a valid title.14 This, if enacted, will herald a shift away from a simple “faith of the records” principle in favour of “pure” property law. Quite apart from the fundamental point just discussed, there are other areas of property law where the policies adopted at the Land Register appear to be in conflict with established principles of property law. Inevitably, these policies have a profound impact on the practice of conveyancing. This is important especially from the point of view of negligence claims because it is the accepted practice of solicitors from time to time which dictates the standard of care which must be met.15 The question which arises in a number of cases is whether the policy adopted at the Land Register marginalises or even destroys existing property law rights. B. SOME EXAMPLES A number of examples illustrate the tension between registration policy and the law of property. (1) Servitudes The policy of the Keeper on the inclusion of servitudes in the title sheet of the benefited property (dominant tenement) is set out in a number of places.16 The Keeper will not include a servitude unless the right has been constituted by formal grant or reservation in a deed, or by statute, or unless there is a court declarator to the effect that a servitude exists.